Hong Kong Double Tax Treaty

As per Hong Kong Inland Revenue Department, our Government adopts the territoriality basis of taxation, whereby only income / profit sourced in Hong Kong is subject to tax and that derived from a source outside Hong Kong by a local resident is in most cases not taxed in Hong Kong. Therefore, Hong Kong residents generally do not suffer from double taxation. Many jurisdictions which tax their residents on a worldwide basis also provide their residents operating businesses in Hong Kong with unilateral tax credit relief for any Hong Kong tax paid on income / profit derived from Hong Kong.

Notwithstanding this, the Government of the Hong Kong Special Administrative Region (HKSARG) recognises that there are merits in concluding Comprehensive Double Taxation Agreements / Arrangements (DTAs) with our trading partners. A DTA provides certainty to investors on the taxing rights of the contracting parties; helps investors to better assess their potential tax liabilities on economic activities; and provides an added incentive for overseas companies to do business in Hong Kong, and likewise, for Hong Kong companies to do business overseas. Therefore, it has been the policy of the HKSARG to establish a DTA network that would minimise exposure of Hong Kong residents and residents of the DTA partner to double taxation. Hong Kong has actively engaged the trading partners in negotiating DTAs (covering various types of income).

Please find the link below for better understanding on which countries has been concluded DTA:- https://www.ird.gov.hk/eng/tax/dta_inc.htm

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